Owners holding up CBA extension
John Czarnecki / FOXSports.com
Posted: 2 hours ago
It depends on the day and whom you are talking with, but there are many within the NFL who believe that commissioner Paul Tagliabue and union boss Gene Upshaw have a handshake deal, but that the commissioner simply can't get enough support from ownership for his extension to the current collective bargaining agreement.
The rationale behind such thinking is that Tagliabue and Upshaw are smart men with a total understanding of the financial bottom line and that they both find it idiotic to spend the rest of their few remaining years on the job arguing about salary-cap issues considering the billion-dollar enterprise that keeps them wealthy and employed.
Basically, this past week has seen a lot of posturing on both sides of this huge financial issue but the word is that Upshaw wants to finalize an agreement and that it doesn't necessarily have to start with 60 percent of the total league-wide revenue. Interestingly, whatever he has discussed with Tagliabue he hasn't shared with his union members.
The players have no idea about what benefits and salary levels may be part of any potential long-range package.
One major holdup is that small-market teams like Jacksonville, Minnesota, New Orleans, San Diego and Oakland would like to limit their very rich competitors from spending more money on salaries above whatever salary cap number is agreed upon. For example, teams like the Redskins and Cowboys have in the past spent more money on player salaries in a given season because of excessive bonuses given star players (the current system allows teams to pro-rate bonuses over the length of a player's contract). Low revenue teams would prefer that there be no "cash over cap" in the new deal, particularly if there's no wholesale revenue sharing among the top revenue-generating clubs.
This may become a major ingredient in the new deal because the wealthy teams seem to be very much against subsidizing the revenue streams for teams like Jacksonville, a move that Cowboys owner Jerry Jones has compared to welfare.
There has been silence on both sides in the past 24 hours, which means that a formal deal does have a chance of happening before Sunday night's deadline. Free agency is supposed to begin on Monday, but that could be pushed back again if a new deal is ratified by 24 of the 32 owners this weekend.
There is no avoiding the fact that there is revenue disparity throughout the NFL, much of it created by Tagliabue's ability to help franchises build new stadiums. In this scenario, franchises like New England, Tampa Bay and Philadelphia, which were in the bottom third of the league 10 years ago, have leap-frogged the middle class into the top 10. Also, a small-market franchise like Indianapolis will eventually be among the league's richest due to a new stadium deal, which included $120 million in stadium naming rights last week.
Colts owner Jimmy Irsay may have wanted to leave Indiana for California, but he was literally forced to stay (smart business decision) because of all the revenue he can earn in Indianapolis compared to fluctuating future promises in somewhere like Los Angeles. The Colts, who recently signed receiver Reggie Wayne with a $12.5 million signing bonus, are in position to keep many of their stars because the franchise is financially secure.
Conversely, Bengals owner Mike Brown would rather not pursue stadium-naming rights and keep Cincinnati's stadium named after his father, Paul Brown. The Bengals lose revenue because of that honor toward Paul Brown, but why should the rich owners make up the revenue difference because of money lost in such a circumstance?
Other owners like Daniel Snyder in Washington and Bob McNair in Houston have large debt payments as a result of purchasing their franchises and improving their stadiums, both of which have naming rights deals. They are willing to share some local revenue, but are both balking at contributions of over $15 million per club.
If a new CBA isn't approved, clubs like the Redskins could be in jeopardy of being over a projected $94.5 million cap. Will they be penalized? Will they be unable to retain some key players? The other issue is that many teams may be unable to compete in the free-agent market while others could go wild if they really want to.
For example, the Arizona Cardinals, Green Bay Packers and Cleveland Browns were $21.8, $20.9 and 20.3 million, respectively, under the projected 2006 salary cap. That is more than enough money to pursue a star running back like Shaun Alexander of Seattle, Edgerrin James of Indianapolis and Jamal Lewis of Baltimore.
Many teams like Minnesota, Baltimore, Jacksonville, Philadelphia, San Francisco, St. Louis and Houston have in excess of $10 million to spend in free agency. Those franchises are in very sound financial shape when it comes to player payroll.
However, if there's no CBA extension, you could see many teams and players agree on one-year contracts like Tampa Bay quarterback Chris Simms did this past week.
Such one-year deals will allow both the player and the team to renegotiate in a potential uncapped 2007 season. It's a gamble, but one that Simms thought was worth taking.